Moneycontrol
Nov 13, 2017 11:07 AM IST | Source: Moneycontrol.com

Lower end of tax slabs could be next on GST Council's rejig agenda

The government plans to streamline the current rates and have only two to three rates instead of multiple rates.

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After cutting rates on 178 goods to bring them under the 18 percent slab, the GST Council will now shift its focus toward the lower end of the tax slabs, reports The Economic Times.

The focus will now be on the 12 percent and 5 percent slabs, a top official told the newspaper. Talks on bringing real estate and petroleum under GST will also be taken up.

The government plans to streamline the current rates, and have only two to three rates instead of multiple rates.

Besides rates, the Council is also likely to discuss simplification of rules and procedures as per the industry's feedback.

On Friday last week, the Council cut rates on 178 goods leaving only 50 luxury and sin/demerit goods like ACs, automobiles paints, cement, washing machines and tobacco, among others, in the 28 percent slab.

The tax cuts will have a revenue implication of about Rs 20,000 crore.

The government has also set up a committee with industry experts to review the new tax regime, which was implemented in July this year.

A committee headed by the Chief Economic Advisor Arvind Subramanian has suggested revenue-neutral rate of 15-15.5 percent. The committee has also suggested standard rate of 17-18 percent and another 40 percent for sin and luxury items such as tobacco. For essential goods, the rate suggested was 12 percent.

GST, billed as the country's biggest indirect tax overhaul, has consolidated a dozen of state and central duties into one single levy. All goods and services have been fitted into four broad slab structure — 5, 12, 18 and 28 percent —along with a cess on luxury and demerit goods such as tobacco, pan masala and aerated drinks.

tags #Economy #GST

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